Carol Miller went to Europe and forgot to pay her $740 mortgage payment on her New Hampshire ski house. For her 59 days overdue on her payment, the bank charged her a penalty of $15. What was the rate of interest charged by the bank?

Answer 1

I = Po*(r/360)*t = $15
740(r/360)*59 = 15
43,660r/360 = 15
121.28r = 15
r = 0.1237 = 12.37%/yr.